Saving on taxes

Monday

Dec 30, 2013 at 12:28 PM

If you own a small business, every dollar matters — especially when it comes to taxes. Whether your business is a partnership or corporation, Uncle Sam offers some sizeable deductions to lower your liability, allowing you to put those dollars toward capital and employees.

Tip of the Week

If you own a small business, every dollar matters — especially when it comes to taxes. Whether your business is a partnership or corporation, Uncle Sam offers some sizeable deductions to lower your liability, allowing you to put those dollars toward capital and employees.

Easy-to-use-tax preparation solutions have become an increasingly popular way for small-business owners to navigate deductions and tax law changes.

1. Buy to save: Whenever buying new equipment, technology, software or even furniture for your business, save those receipts and keep detailed records that include purchase price and date placed into service. You should be able to substantiate any expenses you claim on your tax return. Depreciation can be claimed whether or not your business is profitable.

2. It’s always the season for giving: Company donations of money, supplies and property are all deductible expenses. So are bonuses (and associated payroll taxes) awarded to your employees, partners and officers. Give yourself the gift of education. Take a class or seminar or attend a convention that helps you maintain or improve skills required for your business.

3. Business is sometimes personal: If you use your home for your business, you may be able to deduct mortgage interest, insurance, utilities, repairs and depreciation. Corporations and partnerships can also deduct actual expenses for non-personal uses of your personal vehicle, as well as reimbursements to employees for business use of their personal vehicles. Actual expenses may include costs for fuel, maintenance and parking fees. Your detailed mileage records should include date, total miles, tolls, parking and purpose of trip. You can also deduct vehicle depreciation and loan interest.